diff --git a/devstack/plugin.sh b/devstack/plugin.sh
index aea3c274a..e0a7ca3d5 100644
--- a/devstack/plugin.sh
+++ b/devstack/plugin.sh
@@ -28,9 +28,6 @@ function neutron_lbaas_configure_common {
         die $LINENO "Do not enable both Version 1 and Version 2 of LBaaS."
     fi
 
-    # Uses oslo config generator to generate LBaaS sample configuration files
-    (cd $NEUTRON_LBAAS_DIR && exec ./tools/generate_config_file_samples.sh)
-
     cp $NEUTRON_LBAAS_DIR/etc/neutron_lbaas.conf.sample $NEUTRON_LBAAS_CONF
 
     if is_service_enabled $LBAAS_V1; then
@@ -69,21 +66,29 @@ function neutron_lbaas_configure_common {
 }
 
 function neutron_lbaas_configure_agent {
-    mkdir -p $LBAAS_AGENT_CONF_PATH
-    cp $NEUTRON_LBAAS_DIR/etc/lbaas_agent.ini.sample $LBAAS_AGENT_CONF_FILENAME
+    if [ -z "$1" ]; then
+        mkdir -p $LBAAS_AGENT_CONF_PATH
+    fi
+    conf=${1:-$LBAAS_AGENT_CONF_FILENAME}
+    cp $NEUTRON_LBAAS_DIR/etc/lbaas_agent.ini.sample $conf
 
     # ovs_use_veth needs to be set before the plugin configuration
     # occurs to allow plugins to override the setting.
-    iniset $LBAAS_AGENT_CONF_FILENAME DEFAULT ovs_use_veth $Q_OVS_USE_VETH
+    iniset $conf DEFAULT ovs_use_veth $Q_OVS_USE_VETH
 
-    neutron_plugin_setup_interface_driver $LBAAS_AGENT_CONF_FILENAME
+    neutron_plugin_setup_interface_driver $conf
 
     if is_fedora; then
-        iniset $LBAAS_AGENT_CONF_FILENAME DEFAULT user_group "nobody"
-        iniset $LBAAS_AGENT_CONF_FILENAME haproxy user_group "nobody"
+        iniset $conf DEFAULT user_group "nobody"
+        iniset $conf haproxy user_group "nobody"
     fi
 }
 
+function neutron_lbaas_generate_config_files {
+    # Uses oslo config generator to generate LBaaS sample configuration files
+    (cd $NEUTRON_LBAAS_DIR && exec ./tools/generate_config_file_samples.sh)
+}
+
 function neutron_lbaas_start {
     local is_run_process=True
 
@@ -134,6 +139,7 @@ if is_service_enabled $LBAAS_ANY; then
     elif [[ "$1" == "stack" && "$2" == "post-config" ]]; then
         # Configure after the other layer 1 and 2 services have been configured
         echo_summary "Configuring neutron-lbaas"
+        neutron_lbaas_generate_config_files
         neutron_lbaas_configure_common
         neutron_lbaas_configure_agent
 
diff --git a/neutron_lbaas/db/models/head.py b/neutron_lbaas/db/models/head.py
index fb59d3363..158ad242f 100644
--- a/neutron_lbaas/db/models/head.py
+++ b/neutron_lbaas/db/models/head.py
@@ -14,8 +14,11 @@
 
 from neutron.db.migration.models import head
 
+import neutron_lbaas.agent_scheduler  # noqa
 import neutron_lbaas.db.loadbalancer.loadbalancer_db  # noqa
 import neutron_lbaas.db.loadbalancer.models  # noqa
+import neutron_lbaas.services.loadbalancer.agent_scheduler  # noqa
+import neutron_lbaas.services.loadbalancer.drivers.vmware.models  # noqa
 
 
 def get_metadata():
diff --git a/neutron_lbaas/tests/contrib/decode_args.sh b/neutron_lbaas/tests/contrib/decode_args.sh
index ca9a34306..55faf0a30 100644
--- a/neutron_lbaas/tests/contrib/decode_args.sh
+++ b/neutron_lbaas/tests/contrib/decode_args.sh
@@ -27,32 +27,39 @@
 testtype="$1"
 lbaasversion="$2"
 lbaastest="$3"
-lbaasenv=$(echo "$lbaastest" | perl -ne '/^(.*)-([^-]+)$/ && print "$1";')
-if [ -z "$lbaasenv" ]; then
-    lbaasenv=$lbaastest
-fi
-lbaasdriver=$(echo "$lbaastest" | perl -ne '/^(.*)-([^-]+)$/ && print "$2";')
-if [ -z "$lbaasdriver" ]; then
-    lbaasdriver='octavia'
-fi
 
-testenv=${lbaastest:-"apiv2"}
+case $testtype in
+    "dsvm-functional")
+        testenv=$testtype
+        ;;
 
-if [ "$lbaasversion" = "lbaasv1" ]; then
-    testenv="apiv1"
-elif [ "$lbaasversion" = "lbaasv2" ]; then
-    case "$lbaasenv" in
-        "api"|"healthmonitor"|"listener"|"loadbalancer"|"member"|"minimal"|"pool")
-            testenv="apiv2"
-            ;;
-        "scenario")
-            testenv="scenario"
-            ;;
-        *)
-            echo "Unrecognized env $lbaasenv".
-            exit 1
-            ;;
-    esac
-fi
+    "tempest")
+        lbaasenv=$(echo "$lbaastest" | perl -ne '/^(.*)-([^-]+)$/ && print "$1";')
+        if [ -z "$lbaasenv" ]; then
+            lbaasenv=$lbaastest
+        fi
+        lbaasdriver=$(echo "$lbaastest" | perl -ne '/^(.*)-([^-]+)$/ && print "$2";')
+        if [ -z "$lbaasdriver" ]; then
+            lbaasdriver='octavia'
+        fi
 
+        testenv=${lbaastest:-"apiv2"}
 
+        if [ "$lbaasversion" = "lbaasv1" ]; then
+            testenv="apiv1"
+        elif [ "$lbaasversion" = "lbaasv2" ]; then
+            case "$lbaasenv" in
+                "api"|"healthmonitor"|"listener"|"loadbalancer"|"member"|"minimal"|"pool")
+                    testenv="apiv2"
+                    ;;
+                "scenario")
+                    testenv="scenario"
+                    ;;
+                *)
+                    echo "Unrecognized env $lbaasenv".
+                    exit 1
+                    ;;
+            esac
+        fi
+        ;;
+esac
diff --git a/neutron_lbaas/tests/contrib/gate_hook.sh b/neutron_lbaas/tests/contrib/gate_hook.sh
index 1ca7d8b63..608f07301 100755
--- a/neutron_lbaas/tests/contrib/gate_hook.sh
+++ b/neutron_lbaas/tests/contrib/gate_hook.sh
@@ -50,6 +50,21 @@ EOF
 
 case "$testtype" in
 
+    "dsvm-functional")
+        PROJECT_NAME=neutron-lbaas
+        NEUTRON_LBAAS_PATH=$GATE_DEST/$PROJECT_NAME
+        DEVSTACK_PATH=$GATE_DEST/devstack
+        IS_GATE=True
+        USE_CONSTRAINT_ENV=False
+        export LOG_COLOR=False
+        source "$NEUTRON_LBAAS_PATH"/tools/configure_for_lbaas_func_testing.sh
+
+        # Make the workspace owned by the stack user
+        sudo chown -R "$STACK_USER":"$STACK_USER" "$BASE"
+
+        configure_host_for_lbaas_func_testing
+        ;;
+
     "tempest")
         # These are not needed with either v1 or v2
         ENABLED_SERVICES+="-c-api,-c-bak,-c-sch,-c-vol,-cinder,"
@@ -83,6 +98,7 @@ case "$testtype" in
         fi
 
         export ENABLED_SERVICES
+        "$GATE_DEST"/devstack-gate/devstack-vm-gate.sh
         ;;
 
     *)
@@ -90,6 +106,3 @@ case "$testtype" in
         exit 1
         ;;
 esac
-
-
-"$GATE_DEST"/devstack-gate/devstack-vm-gate.sh
diff --git a/neutron_lbaas/tests/contrib/post_test_hook.sh b/neutron_lbaas/tests/contrib/post_test_hook.sh
index 3bc56904e..4942201d9 100755
--- a/neutron_lbaas/tests/contrib/post_test_hook.sh
+++ b/neutron_lbaas/tests/contrib/post_test_hook.sh
@@ -48,7 +48,7 @@ function generate_testr_results {
     sudo -H -u "$owner" chmod o+rw .
     sudo -H -u "$owner" chmod o+rw -R .testrepository
     if [ -f ".testrepository/0" ] ; then
-        subunit-1to2 < .testrepository/0 > ./testrepository.subunit
+        .tox/"$testenv"/bin/subunit-1to2 < .testrepository/0 > ./testrepository.subunit
         $SCRIPTS_DIR/subunit2html ./testrepository.subunit testr_results.html
         gzip -9 ./testrepository.subunit
         gzip -9 ./testr_results.html
@@ -56,9 +56,17 @@ function generate_testr_results {
     fi
 }
 
-owner=tempest
-# Configure the api and scenario tests to use the tempest.conf set by devstack
-sudo_env="TEMPEST_CONFIG_DIR=$TEMPEST_CONFIG_DIR"
+case $testtype in
+    "dsvm-functional")
+        owner=stack
+        sudo_env=
+        ;;
+    "tempest")
+        owner=tempest
+        # Configure the api and scenario tests to use the tempest.conf set by devstack
+        sudo_env="TEMPEST_CONFIG_DIR=$TEMPEST_CONFIG_DIR"
+        ;;
+esac
 
 # Set owner permissions according to job's requirements.
 cd "$NEUTRON_LBAAS_DIR"
diff --git a/neutron_lbaas/tests/functional/__init__.py b/neutron_lbaas/tests/functional/__init__.py
new file mode 100644
index 000000000..e69de29bb
diff --git a/neutron_lbaas/tests/functional/requirements.txt b/neutron_lbaas/tests/functional/requirements.txt
new file mode 100644
index 000000000..2f9131d0b
--- /dev/null
+++ b/neutron_lbaas/tests/functional/requirements.txt
@@ -0,0 +1,9 @@
+# Additional requirements for functional tests
+
+# The order of packages is significant, because pip processes them in the order
+# of appearance. Changing the order has an impact on the overall integration
+# process, which may cause wedges in the gate later.
+
+psutil>=1.1.1,<2.0.0
+psycopg2
+PyMySQL>=0.6.2  # MIT License
diff --git a/neutron_lbaas/tests/unit/db/loadbalancer/test_migrations.py b/neutron_lbaas/tests/functional/test_migrations.py
similarity index 100%
rename from neutron_lbaas/tests/unit/db/loadbalancer/test_migrations.py
rename to neutron_lbaas/tests/functional/test_migrations.py
diff --git a/test-requirements.txt b/test-requirements.txt
index 9bc881df7..3cdcdad7a 100644
--- a/test-requirements.txt
+++ b/test-requirements.txt
@@ -19,6 +19,4 @@ testscenarios>=0.4 # Apache-2.0/BSD
 WebOb>=1.2.3 # MIT
 WebTest>=2.0 # MIT
 reno>=1.8.0 # Apache2
-# Needed to run DB commands in virtualenvs
-PyMySQL>=0.6.2 # MIT License
 tempest>=12.1.0 # Apache-2.0
diff --git a/tools/configure_for_lbaas_func_testing.sh b/tools/configure_for_lbaas_func_testing.sh
new file mode 100644
index 000000000..e67566c21
--- /dev/null
+++ b/tools/configure_for_lbaas_func_testing.sh
@@ -0,0 +1,51 @@
+#!/usr/bin/env bash
+
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#    http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+# WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+# License for the specific language governing permissions and limitations
+# under the License.
+
+set -e
+
+
+IS_GATE=${IS_GATE:-False}
+USE_CONSTRAINT_ENV=${USE_CONSTRAINT_ENV:-False}
+PROJECT_NAME=${PROJECT_NAME:-neutron-lbaas}
+REPO_BASE=${GATE_DEST:-$(cd $(dirname "$BASH_SOURCE")/../.. && pwd)}
+
+source $REPO_BASE/neutron/tools/configure_for_func_testing.sh
+
+
+function configure_host_for_lbaas_func_testing {
+    echo_summary "Configuring for LBaaS functional testing"
+    if [ "$IS_GATE" == "True" ]; then
+        configure_host_for_func_testing
+    fi
+
+    source $REPO_BASE/neutron-lbaas/devstack/settings
+    source $NEUTRON_LBAAS_DIR/devstack/plugin.sh
+
+    local temp_ini=$(mktemp)
+
+    # Note(pc_m): Need to ensure this is installed so we have
+    # oslo-config-generator present (as this script runs before tox.ini).
+    sudo pip install --force oslo.config
+    neutron_lbaas_generate_config_files
+    neutron_agent_lbaas_install_agent_packages
+    neutron_lbaas_configure_agent $temp_ini
+
+    sudo install -d -o $STACK_USER $LBAAS_AGENT_CONF_PATH
+    sudo install -m 644 -o $STACK_USER $temp_ini $LBAAS_AGENT_CONF_FILENAME
+}
+
+
+if [ "$IS_GATE" != "True" ]; then
+    configure_host_for_lbaas_func_testing
+fi
diff --git a/tox.ini b/tox.ini
index 40189d7e2..edb26f563 100644
--- a/tox.ini
+++ b/tox.ini
@@ -63,6 +63,27 @@ exclude = .venv,.git,.tox,dist,doc,*lib/python*,*egg,build,tools,.ropeproject,ra
 import_exceptions = neutron_lbaas._i18n
 local-check-factory = neutron_lib.hacking.checks.factory
 
+[testenv:functional]
+basepython = python2.7
+setenv = {[testenv]setenv}
+         OS_TEST_PATH={toxinidir}/neutron_lbaas/tests/functional
+         OS_LOG_PATH={env:OS_LOG_PATH:/opt/stack/logs}
+deps =
+  {[testenv]deps}
+  -r{toxinidir}/neutron_lbaas/tests/functional/requirements.txt
+
+[testenv:dsvm-functional]
+setenv = {[testenv]setenv}
+         {[testenv:functional]setenv}
+         OS_SUDO_TESTING=1
+         OS_ROOTWRAP_CMD=sudo {envdir}/bin/neutron-rootwrap {envdir}/etc/neutron/rootwrap.conf
+         OS_ROOTWRAP_DAEMON_CMD=sudo {envdir}/bin/neutron-rootwrap-daemon {envdir}/etc/neutron/rootwrap.conf
+         OS_FAIL_ON_MISSING_DEPS=1
+deps =
+  {[testenv:functional]deps}
+commands =
+  sh tools/pretty_tox.sh '{posargs}'
+
 # If you are running the tests locally you should set the env variable
 # TEMPEST_CONFIG_DIR=/opt/stack/tempest/etc
 [testenv:apiv1]